Posted by Allison on 11 August 2009, 10:55
Here we are back again with another weekly report on what has been going on in the world currency markets. We are in the thick of the holiday season now too, with many of us looking for last minute deals to get away for a week or two. That makes it all the more important to use our currency converter to find somewhere that the British pound will give us a decent rate of exchange.
It’s no wonder that a lot of people have elected to stay at home in the UK this year. But ironically as the holiday season has really got underway, the pound has been doing its best trade against some of the other currencies. In fact it has been better than it has been in quite a while.
This gives us hope for the future of course, even though the two dollar pound (looking at the US dollar in this case) is still a fair way off. But we can still enjoy the thought of getting a lot more for our holiday cash now than we would have got around six months ago. So no matter where you might be thinking of going on holiday, you should keep on reading to find out more about how the British pound has been doing this week.
A typical example is the battle of the pound against the Euro. Since the Euro covers so wide an area it is essential that we discover how well the pound is doing here. If the exchange rate is bad then we will be put off going to quite a few countries as a result.
But let’s stop speculating right there and get down to business. If you are holding off on that holiday for the moment, let’s take a look now at what has been happening in the past week. It could be time to book something very soon.
Our first port of call as always is the battle between the US dollar and the pound. Last time we looked in on these two we were left with an exchange rate of 1.6524. That was after having crept ahead against the dollar during the week, adding on the total of a cent or so overall.
So what could we do this time? Could we add on still more to make sure we carried on sneaking ahead and making good progress?
Let’s see what actually happened. Well the week certainly got off to the right start. In fact we double checked the stats here to make sure we were seeing them right!
Why was this? Simply because the closing rate for Monday to kick off the week was 1.6842. That represents a total increase of over three cents – effectively in just twenty four hours.
What a great start! But could this carry on? Could it really continue after the troubles the pound has been having of late?
It appeared that it could – at least temporarily. By the time Tuesday’s trading came to a close we were on 1.6953. And Wednesday was even better, as we reached a point in the exchange rate that we had not seen for ages. At the close of play on Wednesday we had reached the heady heights of 1.7013 against the US dollar.
But there were still two days to go so anything could happen. And that huge increase from Monday was still rather unexpected. Would we lose out on some of it before the week was out?
Thursday gave us the answer. By the time it was all over and done with on that day, the exchange rate had toppled slightly to 1.6858. Not as bad a loss as we could have seen, but still a cent and a half less than the day before.
There was just one day to go now and we finished up on a lower rate there too. Perhaps it was to be expected after the peak of Wednesday. At any rate we finished on 1.6758 against the US dollar for the week. But that still meant an impressive increase of 0.0234 over the previous week. We think we can call that a success.
So moving on now to the Euro, what could we achieve there? Last time we saw another good result, finishing a cent and a half up on the Euro and ending on 1.1687. Could we improve on that still more this week?
Once again we got off to a good start here. By the close of play on Monday we were standing on 1.1775. That’s nearly a cent up on the previous trading day. The pace slowed down a little the following day, but we still managed to do better by adding on a little more. The final figure for Tuesday turned out to be 1.1786.
Now against the US dollar, Wednesday had been the peak point. Would this prove to be the same against the Euro?
We did add on another small amount, leaving us on 1.1807 for the day, so thus far we did seem to be following the same pattern. That left us open to a drop later in the week though, if we were going to keep up with the pattern for the remainder of the trading week.
And indeed we did see a drop on Thursday as the exchange rate fell to 1.1731. With just one day left for the week, we were now wondering whether we had another drop still to come before the weekend loomed. And if it was going to be a drop, would it wipe out the increases we had managed to bag so far?
The answer to the first part of the question was yes – there was indeed another drop for the British pound waiting in the wings. By the time the markets closed for the week on Friday night, the pound had stalled and dropped further to finish on 1.1672.
But where did this leave us in relation to the same point the previous week? In actual fact there wasn’t a lot of difference at all. What little there was did not go in our favour, but since the drop was a mere 0.0015 we weren’t too worried about this particular loss.
So far we have one good result and one not so good – but what happened over in Hong Kong? Last time it was good news as we finished up on 12.806, adding 0.089 onto the exchange rate.
And once again this time we did well for starters. We managed to climb up to an impressive 13.053 by the time the day was out on Monday. A smaller climb was in store on the following day as well, as we consolidated the early work of the week to settle on 13.138.
But by now this was following a familiar pattern. As we have seen against both the US dollar and the Euro, the pound had climbed up impressively until Wednesday. At that point it went into Thursday losing ground – and it never made it up either. The real question was whether those early gains were enough to swallow the later losses.
Against the Hong Kong dollar it was still too early to get an answer. We climbed up again – predictably – on Wednesday, leaving the pound on 13.185 for the close of play. But we still had those two notable days to go.
We did indeed drop back on Thursday although we managed to stay above the 13.0 Hong Kong dollars level. We finished on 13.065 for that day, so we could breathe something of a sigh of relief at least. But what awaited us on the final day of the week?
Predictably there was another drop in store against the Hong Kong dollar. But it wasn’t as much as we thought it could be. By the close of play we finished the week on 12.988 – which meant we had added on a total of 0.182 over the week as a whole. Now that was a good result – and it meant we had achieved two good results out of three so far this week.
Onto New Zealand now to see what we could achieve over there. We added on two cents against the Kiwi dollar last time, leaving us on a starting rate of 2.5219 now. What could we do with that?
There was very little change on Monday – but the tiny amount of change did go to us. We finished on 2.5253. Tuesday brought more to celebrate with a jump up to 2.5468. But it seemed as if the pattern in those other three countries was not going to apply here.
That was borne out when we slipped back to 2.5204 on Wednesday – the high point in the previous examples we have looked at. Thursday brought no better news either, as we ended up dropping back even more. By the time the markets closed then we were back on 2.5146.
There was just one day to go that week, and it seemed unlikely that we were going to get the better of the Kiwi dollar now. And not only was that proved to be true, it was also a worse drop than we were expecting. The day ended on 2.4880.
So that meant we had lost out on nearly three and a half cents here. A very different result from elsewhere, but we have one more currency still to look at.
That is the Australian dollar, which is often very much the same as the Kiwi dollar in terms of whether the result is good or bad for the pound. We were left just under the two dollar mark last time – on 1.9939 – having lost a cent and a half in total. Would we now see a similar result this time?
Actually we managed to break through the two dollar barrier on Monday, so that at least was a good start. We managed to end up on 2.0042. There was more to celebrate the following day too, with a closing figure of 2.0173. Could we be heading for a better result here after all?
We fell back slightly to 2.0166 on Wednesday but at least it was only a small amount. Two days still to go though – so what would happen next?
Thursday had a drop in store for us. We finished the day on 2.0022 there. But if we were expecting another fall on Friday we didn’t get it. We ended up on 2.0031 as the week came to a close, which meant we had actually added on nearly a whole cent in total.
So it was an interesting week with some good and some not so good results. The news against the US dollar was by far the best of all, but it just goes to show that you can never tell what will happen next.
There wasn’t a lot in it, but by the end of the week and a few ups and downs in between, the Aussie dollar had gone from 0.5875 on Monday evening to 0.5827 on Friday.
It started well before dropping in the middle of the week and then regaining at least some of those losses. But all in all the US dollar went from 0.6991 on Monday to 0.6965 on Friday, wiping out any bigger losses it could have had.
It was enjoying an exchange rate of 7.2573 on Monday night, but by the time the week was up the Canadian dollar had relinquished the upper hand. It finished on 7.1603 on Friday.
If you dabble in currency trading and you have experienced some losses, spare a thought for the Guardian Media Group plc. News reports last week suggested they may have lost a whopping £24 million in misguided currency trading. You can read one of the reports on the Bloomberg website.
So there we are for another week. It was a mixed week, but not a bad one all in all. We must celebrate the good news and hope to see better results from the other currency head to heads next time.
And you can be sure we will be here to report on them, either way. We’ll see you then.